Adrian Tocker draws on his 20 years of extensive experience advising employers across all aspects of employment law, collective bargaining, and workplace relations. In this insight, he provides a practical, balanced, and informed analysis of the proposed Employment Leave Bill, exploring its potential implications for employers, employees, and workplace practices. Adrian offers valuable perspectives on the key changes being proposed, the challenges organisations may face in adapting to them, and the considerations employers should keep in mind as the legislation progresses.
The Select Committee has now reported back on the Employment Leave Bill, the proposed replacement for the Holidays Act 2003. The Committee has recommended the Bill proceed, while making a number of practical improvements aimed at improving workability around issues such as notional rosters, multi-role employees, public holidays, annual leave and remediation.
Having spent many years advising employers on Holidays Act compliance, remediation projects, collective bargaining issues and payroll disputes, my overall view is that the Bill represents a serious attempt to address the systemic problems that have existed under the current legislation for decades. The proposed move to an hours-based model is not simply a payroll change – it is a fundamental shift in how leave entitlements are earned, recorded and paid.
Is it perfect? No.
There are legitimate concerns about the impact on some employees, particularly those with highly variable work patterns, significant additional hours, casual arrangements, or part-time work. Those concerns deserve proper consideration and will undoubtedly continue to be debated as the Bill progresses.
However, we also need to acknowledge an uncomfortable truth.
The Holidays Act has become one of the most difficult pieces of employment legislation for employers to administer correctly. Despite significant effort and good faith by many organisations, payroll compliance issues have become widespread. Numerous employers have spent years and millions of dollars rectifying historical underpayments, often arising from genuinely complex calculation requirements rather than deliberate non-compliance.
For many employers, the attraction of the proposed framework is not reducing employee entitlements. It is the prospect of finally having a leave system that is easier to understand, easier to explain and easier to administer.
The proposed framework provides:
- clearer leave accrual rules
- a more consistent payment methodology
- greater certainty around public holidays and otherwise working day assessments
- improved payroll transparency
- clearer record-keeping requirements
- greater confidence that employees are receiving the correct entitlements and payments.
The political question will be whether the Bill survives largely intact following the upcoming election?
Regardless of where employers sit politically, I think organisations should be paying close attention now. If enacted, implementation is likely to require significant work across employment agreements, collective agreements, payroll systems, rostering practices, HRIS platforms, policies and manager capability. The proposed two-year lead-in period may sound generous, but for larger and more complex employers it will pass quickly.
There are some practical steps employers can start considering now:
- reviewing guaranteed hours and availability arrangements
- identifying employees working regular “additional” hours
- assessing casual employment arrangements
- reviewing multi-role employee structures
- understanding how payroll systems would manage an hours-based leave model
- considering how standard hours, additional hours and roster patterns would be recorded and maintained
- continuing any existing Holidays Act remediation work, as current obligations remain unchanged.
Perhaps the biggest challenge for employers will be ensuring that the new framework is implemented as intended. The success of the model will depend heavily on genuine alignment between employment agreements, actual work patterns, rostering arrangements and payroll treatment. If those things are not aligned, many of the issues we see today will simply reappear in a different form.
Having worked with Holidays Act issues for many years, I’m not convinced the Bill is perfect. But I am convinced the status quo isn’t. The proposed framework feels like a serious attempt to align leave entitlements with how people actually work in modern New Zealand workplaces.
If implemented well, that should lead to clearer entitlements, more accurate payments, greater compliance certainty and, ultimately, a system that works better for both employees and employers.
